tv Bloomberg Markets Asia Bloomberg September 12, 2017 9:00pm-10:00pm EDT
a gathering of people all across the country, so thank you, ladies and german. thank you america. thank you to our friends in canada for calling in. good night everybody. keep calling.g. ♪ it is 9:00 a.m. in hong kong. this is "bloomberg markets: asia." ♪ asia extending the global stock rally, the yen weakens while oil gets a bump from talk of potential output cuts. apple's asiang suppliers after the launch of the most important upgrade in years. killing the buzz, why china's electric car pushed may be
short-circuited by over exuberant investors. we will be tracking these carmakers when markets open later on. suffice to say some of these names have in did up substantially. up substantially. we will look at how it will take over on the chinese mainland. let me recap the data overnight. it is still very important. inflation out of the u.k.. have a look at my bloomberg chart. a bit of a conundrum ahead of that meeting on thursday. that is youris core inflation, 2.7%. that takes you back to 2011. fact of this driven by the the currency has been hammered so much following brexit. we are climbing back up.
we are not even at the midpoint. bloomberg intelligence ran to it numbers and are saying will probably emboldened the hawks, but don't get over excited about this. inflation is overshooting the target. the strengthening in the currency might just take a little bit off that top. 2.7% ahead of that meeting tomorrow. before that, i look at markets in asia pacific. are just under 30 minutes away from the open in hong kong, china, and the reopen in manila, singapore, taiwan, and malaysia have just come online. sophie: stocks mostly higher, bonds sliding. these inflationary effects might be transitory, but it looks like investors don't think the reflation theme is dead. benchmark treasuries just off the lows, flirting with that 2%
level now on the back burner. losing a little ground ahead of thursday's u.s. inflation report. this follows a stronger cpi out of the u.k., faster inflation out of india, and china's stronger inflation numbers over the weekend. the boj is probably liking the dollar-yen above that 1.10 level. we do have the korean won building momentum, gaining .1%. on the back foot. the kiwi one of the outliers comes to currency. dollar snapping a three-day decline, while singaporean stocks falling .1%.
the focus are tech stocks following apples grand reveal, and the taiex up ahead of that. let's look at what's moving the dial in taipei. i.t. shares marginally lower. they are swinging today. afterg to extend gains rising on tuesday. the economy has been supported i robust export growth. apple has been central to that. a top fund manager said the product pipeline from apple and tesla can see the taiex had another 23% towards the end of the year. bestwould make 2017 the year for taiwanese stock since 2009. thetal futures could help inex exceed the record
february 1990. today, one of the assemblers of iphone leading the drop when it comes to laggards in taipei. for now, gaining .1%. david: not exactly overwhelming, is it? thank you for the update. right, let's get you caught up on other things happening in the world with paul allen. tol: in its first response new united nations sanctions, north korea said it will accelerate plans to acquire an eco-weapon that can strike the u.s. the foreign ministry says the security council resolution proves that kim jong-un's push is absolutely right. stephen mnuchin has warned the u.s. may punish china on trade if beijing does not follow through on the new sanctions. president trump is reportedly heading to china in november. the trip will be part of his first official tour in asia.
he is scheduled to attend summits in vietnam and the philippines. president xi jinping invited trump to pay a state visit in april. trump has been critical of china for trade policies and approach to north korea. plans to travel to as many as 13 states in the next seven weeks to sell the idea of a tax overhaul. the administration is trying to avoid the communication failures in its attempt to repeal obamacare. officials hope trump can build support for a broad case, including lower rates and a simplified code. jamie dimon says he would fire any employee trading in bitcoin for being stupid. the j.p. morgan ceo told an investor conference that the cryptocurrency has a fraud. bitcoin has slipped from highs after trying to crack down on its used and fell further after his comments. >> you can't have a business where people can invent a currency out of in error and think people buying it are
really smart. it is worse than -- it won't indwell. end well. paul: global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you for the update. the new iphone, the most expensive yet. too early for the throwback thursday, but some data on your bloomberg. have a look at apple. i'm going to take you back to 2006-2007. it is the 10th anniversary. you're looking at a bunch of numbers. quarter three, quarter of four in6, 80 5% of units sold apple was the ipod. iphone not yet they appeared fast-forward and the iphone starts to appear. 2007, third quarter of
270,000 iphones were so back then. that is quite an improvement. that is an understatement where apple has taken the product and where it is now. we are looking at the iphone as the most expensive yet. dipped on the unveiling of the phone, which has a $1000 starting price tag. it is packed with cool new tech. tim cook revealed the first major iphone redesigned that includes edge to edge screen, wireless charging, and facial recognition. on what thise means for the company and the future of the industry. , your biggest take away from the launch? there were high expectations for this phone. it is the 10th anniversary.
people have been looking for substantial redesign. they put the emphasis as you mentioned on the new iphone 10, the one with the ultimate screen, edge to edge display, augmented reality features baked into it. it will not be available until it is the iphone eight that will be available before that. that phone will come out, a little bit less exciting in many features, but there were high expectations, and apple seemed to deliver on the phone side. watch theyso the new introduced, and a few other products, so expect haitians are very high all the way around and apple. they had this big presentation to show off the latest things they are able to offer. that being said, when you look at how the market reacted,
i'm trying to guess whether or not these revelations were enough to convince investors of apples dominance in the space. rivals have been catching up in terms of product, quality, and hardware. >> that's right. have in on quite the run this year. i think what you saw in the stock market today was they did not rise more, but also did not go down. they appear to have met those expectations. what volumeso see they will be able to ship for the high phone, the iphone 10. it sells for $1000, more than that if you want all of the high-end capabilities. that would be a substantial price tag. it they are able to ship volumes of that phone, they could do quite well this year. what remains to be seen is the vines available on the high-end
phone going forward. david: what does it mean for markets in china and india and the greater asia region? >> it is a challenge for them. they have been struggling both in china and in india. china is the largest smartphone market in the world. they have been losing ground against local competitors. it was interesting to see how those competitors treated this iphone launch. they essentially showed no fear of apple. they are introducing their own funds to show how their phones stack up had to add against the new apple phone. xiaomi came out with a phone yesterday, huawei coming out with its phone also. they feel like they have been ahead on these features, especially on the hardware side, so they feel like they have competitive phones and are not giving much room for apple to gain back some of the ground they had lost. in india, it is different. apple has always been a small player because of the price tag. this will be a challenge for
them because these phones are priced so high, higher than any phones on the market before. it will be challenging for apple to gain ground in india, which is now the fastest growing smartphone market in the world. david: thank you. that was our managing editor for bloomberg asia, talking about tech. applemine the position of and continue the conversation when it comes to china. we look at whether or not this phone will give apple a boost in that market. the singapore grand prix this weekend, will it be the last? we asked the chairman of formula next in an exclusive interview out of singapore. this is bloomberg. ♪
the iphone's 10th anniversary. tim cook took the stage to repeal the company's latest offerings which sported some major hardware upgrades. sophie kamaruddin is checking on how this affects asia. apple can make or break suppliers. some of them depend on apple for more than half of their revenue. series three i watch to send apple stocks higher, but once iphone details came out, apple reverse to gains. assemblers in taiwan also in focus. they also derive half of their revenue from apple. pegatron falling for a third straight session, the lowest since may. apple forecasted to ship 100 of the units
next-generation iphone the second half of 2017 alone. with this iphone upgrade cycle, some component makers may be left out in the cold. we have the ship from lcd to oled, helping the likes of samsung sdi, which is ready to roll out those oled panels. we do have lg display and japan display trying to play catch-up by trying to be oled by 2019. japan display has been embarking on a costly turnaround to make that leap. flash memory chip suppliers, toshiba, sk hynix, and some son is a key rival of apple, releasing its note eight this week. the company said it will not let apple affect its business timetable. david: we are looking at a are. when you look at the features on
that phone. -- at ar. i'm guessing which suppliers in asia will benefit from this, if any? sophie: deutsche bank estimates that a $14 billion market for 3-d sensing hard or will be created by 2020. beenreferred names have noted as having exposure. expects ar may sot apples 2019 profit 27%, perhaps big gains for apple. david: fingers crossed. you and me are both suppliers of apple, you know that? suppliers of cash. foxnt to bring in kitty joining us live on the show.
a very good morning to you. use,der what phone do you and is this something you would buy? and yes,sing an iphone i want to get an iphone 10. this is the worst kept secret because we did get a lot of leaks on the phone and the features. will this be a game changer for up in substantial amounts by the chinese consumer? >> i think there are a couple of ways to look at it. among the new features, i'm interested in looking at the ar. i believe it is the next game changer in china. inc. about gaming, online shopping. toy have been looking for ar increase the experience in china, so when i compare it to local players, they are deathly
more defense compared other local players. wireless charging is another new thing and something people have been looking for, not only charge the phone, but other appliances as well. this is another feature in the chinese market they are looking for. thing i hope that can help to increase the new user market is actually the facial recognition and emojis. in china, emojis is the way the young generation communicates. apple has been having a hard time increasing the young generation user, so hopefully with this feature they can create more attraction for the young generation. at 1000 u.s. dollars, which translates roughly to 6500 renminbi, how big is the market for apple and do you have projections for the iphone 10?
>> sure, ok, i want to look at when apple launched the iphone 6 plus, the new 5.5 inch screen. set apple a record high in china, but when i look at the shipments when they launch the 5.5 inch screen and the 4.7 inch in 2006,he shipments the record high shipments for apple in china, only one third of the shipments was related to the 5.5 inch screen. use the four point 7% -- four point inch screen. i know a lot of people thinking that the people would rather spend the money for the latest technology, but pricing is still a major issue in china. if you look at the users, they have been holding their iphone 6 until the next version of the
iphone eight because the iphone 7 was not that encouraging. at the end of the day, the majority of the shipments is still iphone 8 because of the price. the shipments for iphone 10 if i look at the historical data, i would think -- david: gone were the days when making a superior product would be an enough for you. it is almost a marketing challenge compared to say an engineering feat as well. a phone thatuy cost $1000 when i can get something similar for half the price in china? what is the competition like? what if the similar models you see competing with this phone? >> a few things. one, rand recognition is still very important in china.
apple does have a very good brand in china. i would think in the next year that the iphone can probably get for the executives, so that is important in china. another thing is that it depends on the business model, how apple launches the platform in china. ,hen it comes to b2b business alibaba for e-commerce, tencent ar gaming, and with the facilities and the new phone, can they leverage these two platforms. own emoji, design scheme, and play the game together. that is a different experience. when i shop, i can create an experienced that is beyond the hardware that the people in china are looking for. of course you can leverage the two giants in china to help you. david: fingers crossed.
we're getting an upgrade for morgan stanley. it is overweight new developments there. 7% to 8% tos about the upside. this morning, also a bump for anta ports. that will take you to a new record high. we are $.25 short of a new record high. change the board and some other names. unchanged,ogies underwhelmed. geely votto looks as if it will continue this run. as if it will continue this run. this on the back of the electric vehicle push out of china. , let'suities
♪ david: 9:29 a.m. in hong kong. i little bit muggy. mind that manila is reopening following that shut due to bad weather yesterday. an underwhelming start to the session. the fix out of the pboc. this takes you all the way back to monday. there is the fix right there, the second straight day lower. this essentially translates to other crosses. longer-term, 8900 on your bloomberg.
strengtheen a lot of in the chinese currency. it has been drifting lower. what this chart shows you is comparing the fixing to where it closed yesterday. there was a lot of whispers it could be more significant than it was. right, markets opening up in hong kong, china, and manila. let's get it over to sophie. sophie: on the mainland, chinese large cap down .1%. swings for the hang seng at the open. looking to drop for the first time in four days. this morning, we got a weaker fix for the yuan reference rate for a second straight day. drag on theg that
onshore rate at the open, down .1%. check out korean assets. the won building momentum, and the kospi now up .1%. losses deepening for the csi 300, down .2%. some apple suppliers in hong kong given the big story. top pick atadar, a deutsche bank for their exposure to augmented reality tech. supplier. major aac is key after the removal of the home button. suppliers, the wireless charging game, some players who could benefit from the i watch and air pod wireless iphones -- headphones.
it is a mixed bag when it comes to investor reaction. david: i'm also watching the 10 year yield in japan. 50%, two basis points up. thank you for that update. let's get you caught up with first word news. apple shares dipped as it unveiled its most important new iphone in years to take on growing competition from samsung, google, and a host of makers. iphonek showed off the 10, the first major redesign since 2014 with new features including an edge to edge screen, wireless charger, and facial recognition, and improved camera. the phone starts at $999. preorders are from october 27. opec and its allies are discussing extending cuts by more than three months. they are due to expire in march. an extension into the second
half of next year could be needed. opec ministers are now contemplating that worst-case scenario. despite cuts, will has failed to break above $50 thanks to u.s. shale production. mexico said it will slightly expand its oil hedge for 2019 as it liberalize is gasoline prices. mexico buys a put options from investment banks each year, once considered the largest and most secretive oil hedge. mexico's oil trade is almost in balance. >> it is likely to be marginally higher. we don't have the natural coverage we used to have because now are energy balance is pretty much in tune and we almost export as much as we import. paul: india's august inflation rate accelerated the fastest
since march, exceeding expectations ahead of the central bank policy review. consumer prices grew 3.36% ahead of the median estimate. that is up from 2.36% in july. inflation is now closer to the upper limit of the rbis expectations. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. david: appreciate that update. after a year of poor performance , family office investment returns rebounded, an average of 7% for the year. before that, 0.3%. that is according to a report at of ubs. we have that new report out. here it is. not too long. this is the press release. what does this mean? let's get it from the source, ubs wealth management global
family office head in the asia-pacific. thank you for coming on. 2016 was a decent year. 2017 is a bit of a turkey because risk assets have still rally, but have you seen any changes in the risk appetite, what key trends of form so far? >> 2017 has been has good a year as 2016 so far. management,t risk family offices in asia and globally are more risk aware. that shows up in slightly more elevated cash allocations. it may have more developed equity market allocations. david: are we seeing a move out of public markets, equity and debt? this is anecdotal, some people have gone into private places. >> indeed. on of the interesting dynamics
was allocation to private credit markets. come in,t spreads have rates have not gone up. a lot of clients are allocating to private credit. david: there is no longer an appetite for basic sovereign yield set 2%, 2.5%? i'm trying to understand how this low inflation, low yield environment is affecting wealth. today have more risk appetite, or is it something they were not think of touching? are allocated. and you talk about family offices in asia or elsewhere, they are reasonably allocated in credit. all incremental allocations are going to private credit. they are not investing into rates. means i singled to low double digits, something you cannot get in public debt markets, certainly not sovereigns. david: talk to us about china,
the newly minted rich there. years back, we would be talking with the big exporters, production houses. we have this newly minted younger entrepreneurs. what kind of investment appetite to those people have? what are their demands? >> that me talk about the demands. wealth as happen. that is phase one of that creation. phase two is clearly where china is an top tech entrepreneurs are is the sophistication of wealth. oft year, the pace setting up family offices here in hong kong has been --recedented you'd unprecedented. a lot of this wealth is coming in and getting more professionalize. what are they doing? they are trying to invest away from home markets. that is very interesting to her they would want to invest in the
u.s., europe, not necessarily technology. technology is something they do understand. they don't need financial institutions to help them. has there been such an explosion in family offices? we've noticed that not just in hong kong, but other financial centers in the asia-pacific. i'm wondering if the talent pool is there to support it going forward? ofthere is an element talent. supply is there as the financial industry is where it is in terms of requirements for talent. the really important dynamic is the fact we have seen a lot of succession planning in these family offices. as the next generation is in the process of taking over, most of these next-generation families are western educated and they bring in a lot of western egos. david: is that a concept new in china, would you say? new,think it is relatively
but the interesting to an amicus in the next 10-15 years, three quarters of wealth was he a succession and the next generation. becoming aware. 50% of family offices we surveyed in a share are in the process of writing a succession plan. that is something they are coming to terms with. david: we have to leave it there. we are out of time. head of global family offices in asia-pacific at ubs wealth management. that report on the state of family offices here, globally, not just asia-pacific. some special coverage coming up on bloomberg. we have unprecedented come exclusive access. there we go. mababa group, including jack . we will be rolling on those interviews from thursday morning asia time, culminating in a special half-hour program on friday called alibaba, the
♪ david: let's look ahead to the weekend. for thee curing of formula one grand prix this weekend. the future of their race in the lion city remains uncertain. we will discuss that in a moment. guest is the chairman and ceo of formula one. thank you for coming on the program. we talked about this potentially the last race in singapore. you have been in the job for a few months. how has it been, what surprised
you, and what have your priorities been? >> it has been a good 6-7 months. to do. a lot it is early days, but we have great competition on the track this year. some real energy between mercedes and for worry. fresh energy in the sport. our events have had a new level of excitement. of attendance has been almost every race. we have a lot of initiatives in the digital and television worlds to engage fans in every way possible. david: i would imagine the challenge trying to broaden the appeal of the sport, it is a niche sport with a niche target market which will follow the market. you talk about how you want to expand the appeal. how are you doing that? >> first, it is not a niche sport.
in western europe, the foundation of it, we have an enormous fan base. in asia, the u.s., the sport is still in its early stage growth. there are great fans we have not tapped into and are excited about the growth potential there. it starts with making sure we put a sport on the track that is makesitive, captures what this fort special, the marriage of sport to technology with power, speed, and sound. take that great spectacle that is unique on the global sport and enable fans to connect with it in every way possible life on platforms and the new technologies that are available. david: do you have any specific platforms you're looking at in terms of delivering the content to your target audience? world,ainly the digital .ocial, apps, over the top
the future is increasingly driven by digital platforms and handheld devices. the new generation is clearly engaging with content in new and different ways. continueo make sure we to deliver to our for stork and core friends and take advantage of the platforms that exist today to connect people and exciting and new ways in what is the future of these sports. sport, content for the we wanted to be the greatest board on the planet and we think we have a sport that can live up to that and allow fans to engage in every way possible. david: certainly. a lot of that will hinge on your presence in asia. the grand prix happening in singapore this weekend. will this weekend be the final lap of formula one in singapore? where are you when it comes to negotiations? do you still want to be in singapore? >> singapore is a great race.
it has been one of our anchor races globally. we are proud of the partnership we have here. our goal is to reach an both oft that works for us to extend it. we are actively engaged in that and our goal is to continue to bring this great sport to asia and singapore. reached an agreement yet, but are actively engaged in that discussion and it is our goal to reach an agreement. give us a rough sense just in case there is when you might be able to reach that agreement? >> again, i think discussions like that are better held in private. engaged.tively i will leave it at that. we both believed there is great potential to continue to grow this event here and as an anchor for asia and the whole world. event whenak tackler you see singapore lit up at
night with the cars racing through it. for us andque race we both recognize the potential of what we have built to date, and we are engaged in positive conversations, but don't have a deal until we do come and we are actively engaged in that. david: talk to us about the future of formula one in asia. china and japan will still be there next year. the following weekend will be malaysia's last. i think we had korea and india fall off a few years back. why do you think that is happening, and you think you need to rethink the business model to regain your footprint in the asia-pacific? that some in general of the initiatives in the past, the same thing applies in the u.s. we have had braces go in and out of the u.s., like india. there needs to be a longer-term vision of how you invest and build the sport in places like
that. deale past, it was too driven as opposed to how you invest, find the right partners, and build the sport in the right way. i think we have done that in singapore. we are excited about markets like china where we are looking to create a long-term partnership that allows us to grow the overall sport. reception, great fans. we can see it as we are expanding in digital platforms, the fan base in america and asia. we have to go in with the mindset that how do we build a aort in those regions over 3-5 year and actively engage working with our local partners. they have an understanding of the market that we don't have, but ring the things we know about the sport, support the sport properly, market it, great stars can make sure fans can connect to the stars, team,
drama, competition, deliver a product that lives at two expectations and mary it to local expertise to create evidence that are celebrations. we want the race itself to be at the center of the week long celebration. we have started to do that in many venues. it is early days for us. i've talked about us putting on 21 super bowl's around the world, and that is the type of fans we can host and allow to connect, engage, and it starts with making sure we are on a show that exceeds people's expectations. david: help us out. this weekend? >> all i ever cheer for is a close race, and exciting race. we have great competitors on both sides and hopefully a great season goes down to abu dhabi. david: it has been a great
strategy for the future. >> in europe, you see a shift electric.l to , people arescussion accepting facts and figures and not only emotions. i'm not convinced that diesel will come back. david: those were the views of this ceos at the frankfurt motor show. highlight howt to quickly this came about. have a look at 8055. byd shares limit up yesterday. monthe normalized the 12 chart. there is the hang seng index. a very good year, underperformance, then peekaboo, a little above water on news
china made try to speed up its movement away from fossil feels. -- fossil fuels. the road will be a very long one. a bloomberg gadfly columnist, we talked about byd shares up 20%. are we getting overly excited? is a concept play. it has underperformed the benchmark index for the entire year. it pops up on this news of china looking to phase out fossil fuel vehicles. that is a goal that could take decades and all of a sudden you see the stock pop up. if they discovered some new great car or something like that. david: it was a warren buffett that about 10 years ago. i think he made the investment back then. it did not quite work out. we have seen the stock move up a little bit. did it deserve the run-up?
leader intill the electric vehicles, however, they have been losing market share quite a bit. we are seeing all that these competitors come in, and china in particular is trying to get more growth in the ev market, so they're letting new companies come in. that would just make the competition even harder for a company like byd. david: is it purely an investment play into electric vehicles? >> that is the worry. are you playing the concept or company? the concept, i agree with. china making this goal will push electric vehicles. yd the short-term, is b really going to benefit? .hey are not a pure play only 50% of revenue comes from
cars, and only 20% of that revenue comes from electric vehicles. comes from mobile handsets, and a little bit from batteries. it is not as much of a pure play as investors think. broadly speaking, china wants to do something. how long will it take, 20-30 years? >> that is the idea. these bigo make goals. let's put a man on the moon. let's cure cancer. you need to have your troops rallying behind you. as an investor, what kinds of things are you looking at right now, the winners right now may not be the winners of tomorrow. david: i think it was one of my teachers in high school who said if your dreams don't scare you, they are not enough. next hour, anhe
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: steve bannon is executive chairman of breitbart news. until recently, he was chief strategist at the white house for president trump. during the campaign, he became the ceo of the trump campaign. he grew up in richmond, virginia, went to virginia tech, and georgetown and, harvard business school. he went to work for goldman sachs and became a filmmaker. last week, i went to washington to speak with steve bannon about politics, economic nationalism, president trump, and other issues facing the country. we recorded the conversation at